In reversing the district court last month, the appeals court ruled that the Trump administration's payment reductions were a reasonable exercise of statutory authority.
Hospital stakeholders this week asked the full U.S. Court of Appeals for the District of Columbia to rehear a three-judge panel's ruling last month that upheld the Trump administration's authority to impose site-neutral payments under the Outpatient Prospective Payment System final rule.
"The panel decision sustained a draconian Centers for Medicare & Medicaid Services rulemaking by granting the agency extraordinary deference that it neither sought nor earned," the American Hospital Association, the Association of American Medical Colleges and dozens of member hospitals said in an 83-page appeal filed on Monday.
The Trump administration has maintained that CMS has the authority to impose payment cuts under the Bipartisan Budget Act of 2015 to reduce unnecessary and costly increases in hospital procedures.
OPPS had reduced reimbursement rates for clinic visits at hospital-owned outpatient provider departments by 40%, to match the rates paid for clinic visits in physician offices. CMS estimates that the OPPS final rule could save the Medicare program about $760 million in 2020.
Hospitals have complained that the site-neutral cuts undercut the intent of Congress to protect hospital outpatient departments, which are held to a higher regulatory standard and often serve a sicker, older, poorer patient mix.
In AHA v. Azar, a three-judge panel in July ruled unanimously in favor of the Department of Health and Human Services, reversing a district judge's ruling last September that CMS acted in a way that was "manifestly inconsistent with the statutory scheme" when it finalized the site-neutral payment as part of the OPPS final rule for 2019.
In reversing the lower court, the appeals court ruled that the Trump administration's payment reductions were a reasonable exercise of statutory authority under the Chevron Deference.
In their appeal, the hospitals said the three-judge panel overturned the lower court based on a what the plaintiffs called a flawed interpretation that "gave the wrong answer to several important, recurring Chevron questions."
"This case is not just important in the Chevron abstract. It is critically important in the here-and-now," the plaintiffs wrote.
"It permits the Executive to unilaterally cut hundreds of millions of dollars from hospital outpatient clinics serving millions of patients across the country. Those deep cuts will be felt all the more now, as hospitals navigate the unprecedented challenges imposed by the pandemic."
Federal prosecutors claim that Viztek LLC, a former subsidiary of Konica Minolta, falsely claimed that its EHR software was HHS compliant.
Konica Minolta Healthcare Americas Inc. will pay $500,000 to settle whistleblower allegations that a one-time subsidiary misrepresented the compliance status of its electronic medical records, the Department of Justice said.
Federal prosecutors in Newark, New Jersey, alleged that Viztek LLC, a former subsidiary of KMHA, violated the False Claims Act when it fraudulently obtained certification for its "EXA EHR" software by falsely claiming that the product complied with Department of Health and Human Services certification requirements.
Because of the deception, eligible providers who used EXA EHR inadvertently submitted false claims for incentive payments to Medicare, prosecutors said.
KMHA acknowledged the settlement, but denied the allegations, which were raised in a whistleblower lawsuit.
KMHA Responds
Wayne, New Jersey-based KMHA said "the allegations emanated from a time prior to KMHA’s acquisition of Viztek."
"The company cooperated fully with the government's investigation and maintains that the allegations are unfounded," KMHA said. "Given the high costs and future time demands associated with the investigation, this resolution is in the best interest of the business."
"Without the ongoing management distraction, KMHA can assure its focus remains true to its core mission of contributing to life changing healthcare solutions."
Aetna says it is working to correct the problem and is cooperating with state insurance regulators.
California insurance regulators this week slapped a $500,000 fine on Aetna Health of California, Inc. for "repeatedly failing" to pay beneficiaries' claims under the state's broader emergency room coverage standards.
"The plan’s failure to follow California law for reimbursing emergency room claims is unacceptable," said Mary Watanabe, acting director of the California Department of Managed Health.
Walnut Creek-based Aetna Health of California was also ordered to stop using the plan's national standard to deny emergency room claims.
"This has resulted in Aetna wrongfully denying emergency room claims," Watanabe said. "Aetna must follow the state's healthcare laws to ensure enrollees have access to the care they need."
Aetna issued a statement saying it is working to correct the problem and is cooperating with CDMC.
California law requires a health plan to pay for emergency medical services unless it can show that either the services were never performed or the enrollee did not require them and should have known so.
Aetna of California has had previous run-ins with CDMH over emergency medical services payments in 2015 and 2016 and paid $135,000 in fines. Aetna also agreed to Corrective Action Plans requiring training for employees handling claims for emergency services and reimbursement for emergency services based on the California standard.
"Despite the enforcement actions taken against the plan to correct its deficiencies, the DMHC Help Center received four complaints in 2018 and 2019 showing that the plan had wrongfully denied emergency room claims based on the incorrect standard," DMHC said.
DMHC reviewed a sample of Aetna's denials of emergency medical services and in 2019 concluded that 93% of the sampled claims were wrongfully denied.
DMHC also reviewed Aetna's commercial emergency medical services denial template for HMOs and determined that the templates did not follow California law.
Aetna Responds
Aetna of California issued this statement in response to the settlement.
"We are committed to providing our members with appropriate access to emergency room services and to complying with all laws applicable to our business. For medical emergencies, our members should utilize the nearest emergency room facility.
"We have taken a number of steps to help ensure that we handle emergency room claims consistent with California’s standard for determining whether an emergency medical condition exists. We are cooperating with the California Department of Managed Health Care in this matter."
The $412 billion includes $312 billion through Congress, $100 billion through the Trump administration, and at least $331 million through the Federal Reserve.
The federal government has authorized, spent, or committed $412 billion in coronavirus pandemic emergency funding for the healthcare sector, with more than 70% going directly to hospitals and other healthcare providers, a new analysis shows.
TheCommittee for a Responsible Federal Budget study said the $412 billion includes $312 billion through Congress, $100 billion through the Trump administration, and at least $331 million through Federal Reserve actions.
"A large portion of the money allocated thus far has gone to the health industry," the report said. "So far, roughly $291 billion (71%) of financial support to the health industry has been disbursed or committed."
CRFB said the emergency spending should result in a net deficit of $312 billion after loans and advanced payments are repaid.
Through the Trump administration, the provider relief includes $100 billion of advanced payments to Medicare providers, which will have to be repaid with interest.
Additionally, loan programs account for $58 billion of funds authorized and disbursed to the healthcare sector.
The Federal Reserve has purchased at least $319 million of large health care company bonds through its Corporate Credit Facility. CRFB said the figure is likely higher because they could only track bond purchases greater than $4 million.
CRFB estimates that the healthcare sector has received as much as $20 billion or more in Economic Injury Disaster Loans—assuming proportionality to the PPP.
Other authorized funds include $32 billion to support COVID-19 preparedness, $9 billion in health-related tax breaks, and several billion of additional spending.
Congress has also committed $11.2 billion for vaccine research, development, and manufacturing, including $2.5 billion to Moderna, $2.1 billion to GlaxoSmithKline, $2 billion to Pfizer, $1.6 billion to Novavax, $1.5 billion to Johnson & Johnson, $1.2 billion to Astrazeneca, and $450 million to Regeneron Therapeutic.
HHS says "complexity of the issues raised by comments received on the proposed rule" pushed the date back to August 2021.
The much-anticipated final rule updating physician self-referral and anti-kickback laws has been pushed back for one year, the Department of Health and Human Services announced this week.
"We are still working through the complexity of the issues raised by comments received on the proposed rule," HHS Deputy Executive Secretary Wilma M. Robinson wrote in a public notice, "and therefore we are not able to meet the announced publication target date."
Instead, she said, the timeline has been pushed back to August 31, 2021.
The news was a disappointment for the American Hospital Association, which earlier this month had urged the Office of Management and Budget for an "expeditious review and release of the Physician Self-Referral and Anti-Kickback Statute final regulations" that the Centers For Medicare & Medicaid Services had submitted in July.
The AHA has long complained that the Stark Law prohibiting physician self-referrals is a major hindrance in the transition to value-based care, and that the proposed reforms would “provide space for the types of innovative arrangements among hospitals and physicians that can enhance care coordination, improve quality and reduce costs."
Those new exceptions would apply for Medicare and non-Medicare populations alike.
AHA General Counsel Melinda Hatton on Wednesday "strongly urged CMS to move more quickly to finalize these improvements."
"This is an extremely disappointing setback for hospital and health system efforts to continue to innovate coordinated care arrangements, which have great potential to benefit patients, lower costs and make care more accessible for everyone," she said.
The proposed rule was first unveiled in October 2019, as part of the Trump administration's "Patients Over Paperwork" initiative.
"We serve patients poorly when government regulations gather dust in the attic: they become ever more stale and liable to wreak havoc throughout the healthcare system," CMS Administrator Seema Verma said at the time.
For the sixth time in as many months, the federal government has changed reporting mandates for COVID-19, and hospitals are not happy about it.
Hospital stakeholders are calling on the federal government to toss out new "emergency regulations" for COVID-19 reporting issued this week.
The sixth reporting mandate change since the pandemic began was announced suddenly on Tuesday by the Centers for Medicare & Medicaid Services.
It requires hospitals and critical access hospitals participating in Medicare and Medicaid – under threat of "possible termination" – to include the number of confirmed or suspected COVID-19 positive patients, ICU beds occupied, and availability of essential supplies and equipment such as ventilators and PPE.
CMS says that while "many hospitals are voluntarily reporting this information now, not all are."
"These new rules represent a dramatic acceleration of our efforts to track and control the spread of COVID-19," CMS Administrator Seema Verma said in a media release.
"Reporting of test results and other data are vitally important tools for controlling the spread of the virus and give providers on the front lines what they need to fight it."
The interim rule skirted the normal comment period because of the COVID-19 Public Health Emergency, which runs through the end of October.
Rick Pollack, President and CEO of the American Hospital Association, said the rule was a "heavy-handed regulatory approach put forward by the Administration (that) threatens to expel hospitals from the Medicare program."
Pollack noted that since February CMS has made at least six changes to data reporting mandates, even as "94% (of hospitals) are reporting information, according to the federal government."
"It’s beyond perplexing why CMS would use a regulatory sledgehammer--threatening Medicare participation--to the very organizations that are on the frontlines in the fight against COVID-19," Pollack said.
"This disturbing move, announced in final form without consultation, or the opportunity to provide feedback through appropriate administrative procedures prior to it becoming effective, could jeopardize access to care and leave patients and communities without vital health services from their local hospital during a pandemic," he said.
That sentiment was shared by Chip Kahn, president of the Federation of American Hospitals, who complained in a Tweet that CMS "blindsides industry with mandatory reporting rules. Not only r rules not vetted but sudden change could jeopardize patient care. CMS action should be reversed."
The big question, however, is what will happen to telehealth when the coronavirus subsides.
The coronavirus pandemic has accelerated the use of telehealth and provided a stop gap for in-person physician visits, and large healthcare providers and distributors are positioned to benefit from this transition, Fitch Ratings said.
"For now, telehealth usage is partially offsetting service revenue that would have otherwise been lost during the pandemic," Fitch said. "Virtual care provides revenue continuity, with positive knock-on effects through the healthcare supply chain as doctors continue to prescribe medications."
The big question, however, is what will happen to telehealth when the coronavirus subsides.
"Post-pandemic demand will depend on whether payers, including Medicare and private insurers, continue to cover telehealth visits and patients continue to see value in virtual care," Fitch said.
In-office visits will remain "the primary delivery channel" for healthcare in the United States after the pandemic, but telehealth services will continue to grow as it matures and becomes more nuanced, and as providers figure out how to bill for telehealth services.
The federal government provides funding for telehealth during the pandemic under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Coronavirus Preparedness and Response Supplemental Appropriations Act.
Earlier this month, President Donald Trump signed an executive order proposing the Centers for Medicare and Medicaid Services make some telehealth provisions permanent.
Fitch notes that money is flowing into telehealth through M&A, venture capital and other investors who see the need for infrastructure to support virtual services.
"However, penetration post-pandemic could be limited by reimbursement uncertainty," Fitch said, "particularly as CMS seeks public input on which telehealth services to make permanent; access to high-speed internet services among seniors; and questions about the effectiveness of video versus in-person visits."
Teladoc Health, the largest telemedicine software provider in the US, reported 2.8 million virtual visits in the second quarter, more than triple the same period last year. The company said it expects gains to spill into 2021, Fitch said.
Increased demand for remote services during the quarter was confirmed by HCA Healthcare, Universal Health Services, Tenet Healthcare, and Community Health.
HCA recorded more than 500,000 virtual visits, Tenet had more than 190,000 virtual visits within its physician business and tens of thousands of hospital-to-hospital telehealth visits, and Community Health had more than 230,000 virtual visits, Fitch said.
"Healthcare providers are particularly challenged by depressed volumes of elective patient procedures during the health crisis," Fitch said. "HCA, Universal and Tenet have sufficient rating headroom to absorb the effects on volumes, assuming the sector experiences a strong recovery in elective patient volumes beginning in the second half of 2020 and into 2021."
"Volume declines are more detrimental to Community Health, however, due to its already stressed credit profile," Fitch said.
Telemedicine could also partially offset pandemic-related volume declines for pharmaceutical and medical distributers.
McKesson said telemedicine accounted for up to 15% of its oncology practice in the second quarter, and AmerisourceBergen said its community-based practices adapted to telehealth visits, Fitch said.
"Longer term, healthcare providers may be able to attract, service and retain more patients with virtual care, due to the convenience provided, and, depending on coverage levels, bill for calls that were previously uncompensated," Fitch said.
"Increased patient flow and greater operating efficiency could improve profitability and cash flow, as information collected during visits along with data from other technologies could help control healthcare costs."
Employers contracting with Aetna Whole Health – Cleveland Clinic could save as much as 10% in healthcare spending by choosing the new ACO's narrow network.
Cleveland Clinic and Aetna have formed aco-branded Accountable Care Organization that they say will reduce healthcare costs for employers in Northeast Ohio by as much as 10%.
"Given the current economic climate, employers are looking for a cost-effective, high quality insurance plan that also provides access for their employees to coordinated care and advanced medical expertise," said Cleveland Clinic CFO Steven C. Glass.
"Cleveland Clinic is committed to improving the health and wellbeing of Aetna members, and we look forward to working together to deliver value-based health care to an expanded patient population," Glass said.
Employers contracting with Aetna Whole Health – Cleveland Clinic ACO could save as much as 10% in healthcare spending by choosing the ACO's narrow network of Cleveland Clinic employed and affiliated providers over an existing Aetna broad network plan.
Employers in the 10-county region of Northeastern Ohio can enroll in Aetna Whole Health – Cleveland Clinic this fall, depending on segment and group size.
The new ACO will also provide CVS Health-owned Aetna commercial plan beneficiaries across the nation access to second opinions by Cleveland Clinic for some conditions and makes available Cleveland Clinic's Cardiac Center of Excellence program to Aetna plan sponsors. members.
Aetna care managers will work with beneficiaries to design personalized care plans.
Aetna's Angie Meoli, senior vice president, network strategy and provider experience, said the affiliation with Cleveland Clinic is "part of CVS Health's goal of becoming the most consumer-centric health company."
"We are facilitating access to high-quality health care where and when consumers need it," Meoli said. "Cleveland Clinic is renowned for delivering exceptional health care, and our new collaboration will enable our members to receive the personalized and coordinated care they need to get and stay healthy."
Plaintiffs say the final award is expected to reach $13 million with attorneys' fees and interest. Centene said it will appeal.
A federal jury in Arkansas this week handed up a $9.4 million breach of-contract award to a Tennessee-based emergency physician group after finding that subsidiaries of Centene Corporation violated their contracts by systematically underpaying the physicians.
Attorneys for Knoxville-based Southeastern Emergency Physicians, LLC, a subsidiary of TeamHealth Inc., said the final award could hit $13 million with legal fees and interest.
"They treated commercial insurance claims like Medicare payments, they tried to hide which company owed the money, they paid late. Their cavalier attitude toward these essential workers was abominable," Zavitsanos said.
In an email to HealthLeaders, NovaSys Health, a Little Rock-based subsidiary of Centene, said: "We disagree that NovaSys breached the contract, and we plan to appeal. All of the health insurance claims at issue have already been paid at the appropriate rate for ACA claims."
According to the plaintiffs' attorneys, Centene-controlled NovaSys agreed in a 2011 contract to pay the ER doctors 75% of the regular commercial insurance billing rates. Instead, the doctors were paid only 10% of the billing, and slowly.
The plaintiffs also alleged that Centene tried to hide their ownership of the entities responsible for paying the doctors.
"Today's ruling is a win for frontline providers heroically risking their lives treating patients during the deadly COVID-19 pandemic. Centene's actions are all too common on the part of payors," TeamHealth CEO Leif Murphy said.
"Large and profitable health insurance companies are using their market power to systematically underpay doctors, cancel contracts, and further boost their record profits," he said.
The consolidated California v. Azar and Texas v. Azar will be heard one week after the presidential election, but a ruling is not expected until June.
The U.S. Supreme Court has scheduled oral arguments for November 10 in a multistate lawsuit that will determine the future of the Affordable Care Act.
The nation's highest court scheduled one hour of oral arguments in the consolidated California v. Azar and Texas v. Azar lawsuits, but a ruling is not expected until next June at the earliest.
The plaintiffs in both cases are asking the justices to rule on the constitutionality of the individual mandate without a tax mandate, and whether the mandate is severable, and the rest of the law can remain in place.
In December, the Fifth Circuit Court of Appeals ruled that the ACA's individual mandate was unconstitutional but remanded the case to a district court that had ruled the entire law was unconstitutional.
The 18 states hoping to have the ACA tossed are led by Texas Republican Attorney General Ken Paxton.
California Democratic Attorney General Xavier Becerra, lead plaintiff among 20 states and the District of Columbia that hope to save the ACA, had asked the high court for an expedited hearing.
Becerra said Wednesday "it makes no sense" that "President (Donald) Trump and 18 states have decided to go all the way to the Supreme Court to rip away the Affordable Care Act at a time when our nation is suffering the worst pandemic we've seen in more than a century."
"We will be at the Supreme Court to lead the argument to save affordable healthcare, and with it, the lives of countless loved ones," Becerra said.
ACA backers say the program protects 133 million people with pre-existing conditions and provides health insurance for 20 million people.
